Central Florida Real Estate Blog

On September 10, 2010, the MFRMLS-My Florida Regional Multiple Listing Service (http://www.mfrmls.com/) which covers most of the Central Florida market released the August Real Estate Sales & Inventory Report for the Orlando, FL Region. While an upward pricing trend appeared over the summer months, it looks like the Orlando market is unlikely to recover anytime soon. Since June, we have seen a continual erosion in the average sales price month-over-month through the end of August for an average depreciation rate of 7.7%. Will home values continue to decline? Is there any hope for the start of a recovery before then end of this year? Let's look at the numbers before you draw your conclusion.

The number of single family homes sales that closed in the month of August increased slightly to 2,429 units, or an increase of 2.5% from July.  Of those August sales, almost 71% percent of the properties were distressed, being either REO's-bank owned foreclosures (48%) or short sales (23%). The remaining “arms-length” transactions made up the balance of the May sales. While inventory is slowly being absorbed, there still is over 17,000 active homes available in the marketplace. MFRMLS currently shows a 6.9 month supply of inventory...??? While inventory may "appear" to be evaporating, these numbers are significantly distorted due to the large number of pending short sales which most likely will reenter the active inventory or end up in foreclosure.

The current average list price of a home has decreased 5.9% from July to August, and is still down 12.9% from August'09 to August'10. 

In regards to the average sale price of a home, we saw a decrease of 5.6% from July to August. From August'09-August'10, that number is down 12.3%. Also consider the dynamic between Sellers and Buyers during the negotiating process. As of the January'10 report, Buyers were negotiating an average of 6% off the asking price. As of August, that percentage had narrowed to 5%. It appears Sellers are beginning to getting more realistic regarding their asking price, thus creating a more narrow negotiating margin.

The number #1 selling price range is still the $1.00-$49,999.00, making up over 21% of the August monthly sale. In this category last month there was over 600 units sold. Furthermore, the $0.00-$99,999.00 range accounted for 46.18% of the sales, while the $100,000-$199,999.00 range accounted for 34.75%. Lastly, the $200,000-$300,000.00 range accounted for another 7.44% of sales. Collectively year-to-date, the $0-$300K range makes up over 88% of all sales in the area. In comparison to the rest of the market, Sellers above the $300,000.00 range must get very realistic regarding price & marketing strategies. On the flip side, Buyer are going to have a huge advantage in negotiating on a luxury home while benefiting from a much lower market demand. As expected, sales have been softer following the expiration of the homebuyer tax credit. It appears rumors are floating around Washington, DC that Congress is considering reinstating some form of the tax credit to add additional stimulus to the real estate market.

For all you Buyers and Investors...according to the August edition of DSNews-Default Servicing News (http://www.dsnews.com), Florida is now ranked #1 in foreclosure and loan delinquency rates in the country. As of the last reporting cycle in May '10, the foreclosure rate stood at 11.3%, while the 90+day loan delinquency rate was at 18.6%. Lastly, the REO (real estate owned) rate stood at 1.2%. In my opinion, these stats continue to support the opinion that Central and South Florida markets are going to offer great buying and investment opportunities for months, if not years to come.

Where is the market heading from here? Industry Analysts are talking more and more about the "Shadow Inventory" of foreclosure lurking behind the scenes potentially creating another significant round of residential foreclosure hitting the marketplace. If these concerns come true, we could see further erosion of home values in the near term. Also, don't forget about the looming commercial marketplace which could further erode any hopes of a recovery in the near future. Stayed tuned, I'm predicting a roller coaster ride over the next 6 months....

If you would like a full copy of the Orlando Regional Sale & Inventory Report, please email joe@rockspringsrealty.net and a copy will be emailed to you at no charge. 

Rock Springs Realty is a full-service Real Estate Brokerage working with Buyer, Seller, and Investors throughout the Central Florida Area. We cover all areas of Lake, Sumter, Orange, Seminole, Osceola, and Volusia Counties. Our sales staff has extensive experience Buying and Selling normal, REO (Bank Owned Foreclosures), and investment properties. I welcome the opportunity to confidentially discuss your real estate needs. You can reach me toll free at (877) 333-2811 or on the web at www.rockspringsrealty.net

P.S. - If you would like a list of bank-owned foreclosure properties in your area, please contact me at the toll free number above.

Best Regards,
Joe Bornstein, Broker/Owner
Rock Springs Realty, LLC
3780 Rochelle Lane
Apopka, FL 32712